Global

Details

  • Industry: Retail, Food, Drink & Consumer Goods
  • Type: Business and industry issue
  • Date: 11/1/2011

India knows no boundaries 

India knows no boundaries
Could cricket – and the Indian Premier League – offer a template for taking the country’s consumer businesses to the world?

Cricket is not a sport known for its radicalism. For a hundred years, it was a game contested by gentlemen in flannels and, to much of the world, it is a mystery.


In India it is practically a national obsession. When the national team, led by legendary batsman Sachin Tendulkar (pictured) won the 2011 World Cup, celebrations brought the country to a standstill. But it is India’s domestic game – and its ability to monetize the fanaticism of the population – that has fascinated marketers and prompted researchers from Columbia, Harvard and others to decamp for Mumbai.


Launched in 2007, the Indian Premier League (IPL) brought US-style razzmatazz to a staid game. Within two years, it was valued at US$1.6bn, making it the world’s fifth most valuable sporting property, according to SportsPro magazine. In 2011, match day audiences regularly topped 100 million.


IPL has attracted hefty investment from brands such as Pepsi and Wrigley’s. But its runaway success is down to more than canny marketing, and could hold lessons for Indian businesses, and those who want to break into the country.


IPL uses a form of the traditional game called Twenty20. But that is far from its only innovation. Its founders understood that to build a successful property they would need to bypass traditional corporate structures. They attracted some of the country’s biggest brands, convincing them of eye-watering returns, until the governing Board for Control of Cricket in India (BCCI) had no choice but to allow them to set up their league under its jurisdiction.


IPL unlocked the value of India’s middle class, and the buying power of women. The platform attracted Bollywood stars to associate themselves with the game and ensured they were spotted at matches: some estimates put the female audience for IPL at 45%. And they partnered with IMG, the world’s biggest sporting event group, to ensure best practice from the likes of soccer’s English Premier League were brought in.


Indian retailers could learn plenty from the IPL. The sector employs 10% of the population, compared to 3.3% in the US, yet there are only 57 Indian companies in the Forbes Global 2000 and only one, tobacco giant ITC, serves consumer markets. Indian companies have struggled to market themselves outside the country, even as its economy has become globally competitive, says Nandini Chopra, a Corporate Finance Partner and Head of the Consumer and Retail practice in KPMG in India.: “The challenge for Indian companies is to build brands consumers outside India can buy into. While brands like Tata are already familiar in large parts of the world, consumer companies from India have embarked on brand acquisitions in far flung markets including Latin America, SE Asia, Africa and the Middle East.”


Not everything in the IPL garden is rosy. Audience growth has slowed as the initial lustre has faded. Even so, cricket bible Wisden speculated that Indian clubs could take over moribund English county teams. And that, as the English like to say, simply isn’t cricket.


Lessons from the IPL

  1. Partner with Bollywood
    India’s film industry sells almost every product, but beware: middle class consumers are wary of endorsements that don’t seem appropriate.

  2. Be audacious
    The IPL offers huge salaries to attract the biggest names from England and Australia.

  3. Stay in the black
    The governing body has incurred no debt, with the onus on clubs to recoup their outlay.

back to top



Nandini Chopra

Nandini is a Corporate Finance Partner and Head of the Consumer and Retail practice in KPMG in India.

 

Share this

Share this